The Significance of Confidentiality in Business Sales

The Significance of Confidentiality in Business Sales

Each time we connect with a business owner thinking about the sale of their business, we are met with big concerns over confidentiality. The business owner does not want their competitors to know, or they don’t want their employees to know; the list of reasons in favor of confidentiality is lengthy and we don’t disagree with their importance.


It is crucial to keep the pending sale of a business confidential until after the trade is completed for a number of reasons. One important reason is we don’t want employees to jump ship. Many people are only exposed to the massive mergers & acquisitions we hear about on the news, like Facebook acquiring Instagram. And oftentimes, these news stories focus on descriptions of restructuring and employees getting laid off. With this kind of information as a reference point, it is no wonder most people think a business sale will have negative consequences.


So when we work with a seller we make sure to outline the main ways we control the confidentiality of a business sale, all of which are built into our processes. First, of course, the business broker is held to the standards of a non-disclosure agreement with the seller. Second, the business is marketed through blind ads, which describe the business without giving away any identifying characteristics. So instead of showing the business name, like “Stephen’s Cupcakes”, the business may be titled “Specialty Bakery in Littleton, CO.”


The next layer of protection is controlling the professionals who get to learn more about a business. After a business buyer inquires on a business listing they have to sign an NDA and then they are given a curated executive summary of the business to learn more. At this time a Business Broker will pre-qualify the buyer’s financial capabilities and skill set. If the buyer is still interested after being pre-qualified, they get to meet in person with the business broker. It is not until after this first meeting that they will have a chance to meet the seller in person or take a tour of the business.


As you can tell, there are a number of checkpoints throughout the sales process that make sure that valuable business information is only exposed to qualified and truly interested buyers. To learn more about how Transworld manages confidentiality during the business sale process, we invite you to schedule a free consultation with one of our brokers, or visit our website for more information.


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Rachael Holstein has been the Marketing Manager for Transworld - Rocky Mountain since 2016. Her work experience has been largely focused on business development and marketing in business brokerage, finance, architecture, property management, and information technology. A long time resident of Cleveland, Ohio, she attained her undergrad from John Carroll University and her Master’s Degree from Cleveland State University. In 2013, she relocated to Denver with her husband, Joe, and her furry companions to explore the mile high lifestyle!


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